tv World Business Today CNN September 20, 2011 1:00am-2:00am PDT
i'm zain verjee at cnn in london. yemen is intensifying its crackdown on anti-government protesters. two people were killed in the capital tuesday morning. witnesses in the city say security forces opened fire and civilians have been killed in the past two days. fighter allying bearing down on gadhafi's strongholds but making little progress so far. gadhafi loyalists are creating a humanitarian disaster in bani walid but leaving civilians to starve. palestinian authority president mahmoud abbas is in new york to address the u.n. most line up to support his bid
but israeli wants new negotiations with him and the u.s. is threatening to move his move in the security council. in britain murdoch news international, the publisher of the defunct "news of the world" is negotiating a settlement with the family of a murdered teenager. those are the headlines. from cnn, the world's news leader, i'm zain verjee and "world business today" starts now. good morning from cnn london. i'm nina dos santos. >> and a great afternoon from you, i'm manesha tank. this is "world business today" and these are your top stories. the global showdown and prada profits are pushed ever higher. a worry iing tragedy in
greece. higher suicide rate. and the surprising makeover for the people's car. look at the gold-plated car here. >> let's send you straight to the stock market action. this is where the leading indices stand about an hour into the trading session, the dax is leading the way up in excess of 1.5%. in italy investors seem to be shrugging off news that standard & poor's implemented a downgrade. they cut italy's rating from a plus to just a. that's on the back of concerns about the weak mick growth and political uncertainties. the trading at 14, 240 ftse.
>> tokyo's nikkei and the asa had both lost 2% dragged down by banking stocks. hang high-rising slightly but notefully asbury. a number of problems we told you about but it's not looking good for them, nina. >> monita, how the u.s. markets fared. on a day on which barack obama made it clear that he plans to put new taxes on some of america's richest people and the dow jones average ended down almost 1% as did the s&p 500. the nasdaq composite finished down by about more than a third of a point.
most u.s. markets look set for a low open when they begin trading tuesday. this is where the u.s. futures stand. in the premarket action, a little bit of a mixed picture. the nasdaq seems to be inching up. the other two indices flat but teetering on the red. manesha. >> it seems to be a lot of volatility out there but getting more news out of the u.s. barack obama has made it clear that he's ready for a political fight over deficit reduction, a special congressional committee has two more months to come up with its own recommendations on but on monday the president outlined his debt by slashing programs and raising taxes on the wealthiest americans. >> i will not support any plan that puts all the burden for closing our deficit on ordinary americans.
and i will veto any bill that changes benefits for those who rely on medicare but does not raise serious revenue but asking the wealthiest to pay their fair share. >> well, the president's plan includes what is called the buffett rule after warren buffett. he recently wrote wealthy americans don't pay enough taxes. it would bring the tax rate for those earning more than a million dollars a year up to those earning considerably less. >> many say his plan is dead on arrival and calling his proposal to raise classes on the wealthy class warfare and john boehner says he has a better idea instead. >> now, the president wants to talk about increased taxes. listen, i am for increased revenue of the fellow government. we need revenue, but i'm going
to get new revenue but putting americans back to work again and back on the tax rolls. >> well, president obama's plan is a complex mix of spending cuts and also tax hikes. cnn's john king has the fine print on this and the challenges that the president faces trying to make it all happen. >> here's the main proposal. he wants mandatory spending cuts, $580 billion, tax revenue, 1.5 trillion over the next ten year, war savings, the president says he'll save 1$1.4 trillion. interest savings, if you're not spending this money that means you're borrowing less and the government would save $430 billion in interest over that decade and the august debt agreement to raise the debt ceiling. just a couple of things that raise red floodingags.
the president will say money that we shouldn't be paying doctors. he promises to restructure government shrinking government, some are skeptical. we have a red flag on this. they won't give him these higher tax increases including letting the bush tax cuts expire. the war savings, will this really happen? a lot in congress say you'll save money that fast and the president shouldn't count this. the interest dasavings come if you're spending less. the obama plan, $1 trillion from the august debt deal but remember the president wants to spend $500 billion here, a half trillion for his new jobs program so net $4 trillion in savings as the president sees it. >> well, many companies are
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the euro is weakening. standard & poor's decided to downgrade italy's credit rating after similar downgrades over the last six months to spain, ireland and greece. the euro trading 1.36 and the japanese yen at 76.53. welcome back. this is "world business today." >> probably not the bonds but italy certainly has standout performers and one of them is the italian fashion brand prada. it has clocked up an impressive
profit. it's largely thanks to consumers right here in asia. prada took advantage of its growing following. with an ipo on the stocks exchange they happened earlier. ramy inocencio has more. >> prada reported a 74% rise in its net income for the first half compared to the same period in 2010. in hard cash, what does that mean? $244 million and the reason for this profit surge, higher demand from mainland china. this year alone prada has opened nine new stores on the chinese mainland. by 2013, the brand aims to have this many, 550 of them. all around the world. half of these stores, about 225, of course, right here in asia and about 50 of those will be, guess where, in china. basically that's 10% of all of
prada stores in one country by 2013 so it seems as if it might have been worth it in terms of profits but let's take a look at its share price as well as others who debuted in hong kong earlier this year. glencorps, the largest commodities trader, the world's biggest ipo fell 17.5% and mgm china which also debuted earlier was 19.1% down. also, samsnide was down and prada has only risen by 1.7%. >> ramramy seize has happened b so far as the ipo market are they coming off the table later?
>> i spoke with one investment an list earlier. he said companies will,ing, only float when the markets are stable. markets are anything but that right now. no one can tell us when they'll be stable again. there will be still windows of ipo opportunity. basically when there is an upswing, they're going to try to anticipate that and push that higher. better stock price means a better store right here in the media. i spoke with the hong kong stock exchange and told me as of august 31st there were some interesting numbers i want to share. for example, 37 inactive applications for ipos. of these actually 26 prosecutwe approved to go public but those companies decided against it because of less than stellar market conditions. the names were withheld. i did ask them over the same time frame. we did see a tote alf this many, 64 companies go public here in hong kong and ending on a
positive note as of august 31st there are still this many applications, 136 still active. although many are not going through with ipos, many want to get listed and raise that. reuters says they include china everbright which already postponed its debut once as well as bnp paribas. >> ramy, thank you very much. burberry presented its summer collection for 2012 with plenty of fanfare. i went to catch up with the ceo of this 155-year-old british firm. now, i asked her about the crisis in europe and whether it's affecting the bottom line. >> if you look at any of the endless estimates they're estimating the luxury sector will continue to grow double
digits the next couple of years. in luxury, over 60% of the business is done when people are traveling for tourism so you're not -- of course, there is a great local clientele but have a heavy influx coming in so i think there's slightly more resilience. >> well, plenty for from the ceo of burberry in "world business today" in 9:00 in new york and 9 p.m. in you're in hong kong. >> yeah, look forward to that. coming up on "world business today," flying high. an aviation boom is predicted. as treat you like a policy, not a person. instead of getting to know you they simply assign you a number. aviva is here to change all that. we're bringing humanity back to insurance and putting people before policies.
we'll take a look at the price of crude. here's the nymex contract. we are gist before the $86 a barrel level. we had dipped below that. what's interesting. people are assessing what's happening with the global economy and predicting lesser demand for oil. welcome back. it's "world business today." live on cnn. the planemaker airbus is predicting the number of passenger aircraft worldwide will probably double over the next 20 years to come. that's despite the specter of rising fuel rises that manesha was just telling us about. the european company expects airlines to expand and to continue growing as, of course,
we see a number of megacities and as the carriers west replace the aging fleet, that underlies these kind of buoyant figures. airbus is forecasting demand for 28,000 new jet s by the year 200 and worth $3.5 trillion. that is up some 7% on the forecast that it made early in december of last year. now, across the atlantic its rival boeing is even more optimistic. in june it boosted its forecast by 8.5% to $4 trillion. it prekicks airlines will now want about 33,500 new planes. one isn't so positive. back in june the international air transportation association put its profits in half because of the recession fears in the
world's developed economies particularly in europe and in the united states. manesha? >> certainly interesting times for airlines. richard quest spoke to the chief operating officer of airbus john leehee. >> we have been right. our methodology worked. gdp growth and the other are intertwined. such as air traffic. we go back to the lost decade of 2000 our forecast in the year 2000 of what would be in 2010 was spot on. we said 4.8 trillion passenger -- if we can move 5% more people in 2010 than we did in 000 and do it with the same amount of fuel consumption, the only explanation is we're doing it more efficiently. >> reporter: you may but by your
forecast some 17,000 of these 27,000 planes are new. they are not merely replacing existing fleet. they're actually adding to the number of aircraft in the sky, correct? >> yes. in certain ways they are but if we can do this without increasing our fuel consumption or doing it very moderately we can keep gdp growing. >> one of the key challenges facing the industry as a whole is reducing its dependence on fotsle fuels. european airlines actually agreed to increase green fuel production by it less than 2 million tons by 2020 but while he try to make it cleaner there is some concern that using bio fuels could mean fewer food
crops. one airline that made a commitment to it is lufthansa. it used a mix of regular oil and bio on four daily domestic flights and we spoke to him in a cnn exclusive. >> we have to prepare for new world aviation using bios in a substantial amount. there are two challenges ahead. the second one is do we get enough of bio in the future. >> the other challenge is one cost and second, which bio mass is the right fit for aviation fuel? >> exactly. this is why it is interesting that different airlines so far have tried. different sources of it. for us it is necessary to have bio fuel which is not competing with the food chain which is not competing with water supply and
we have to maintain the credibility of the process by an adequate certification. >> do you agree in general as demand for biofuel increases the specific crops that are grown for bio fuel will eventually compete with food production. >> basically we have to choose it in a way that it is not the case because as soon as we have this kind of competition, we will be in trouble which is there will be other people complaining. so we have deliberately chosen those plans which can grow in areas where normal crop production will not be feasible anymore. >> the investment you've put into this program, the bio fuel trial, that $9.3 million, is it -- is the investment worth it when maybe perhaps your focus should be or the temptation is to cut costs where you can? >> i think if you run a company
with a long-term perspective in terms of having a sustainable mobility approach, then you have to do both. we are not quite sure at this point in time that bio kerosene is really cheaper. right thought it's much more expensive than classic jet fuel so you're very much cost focused and in our industry we always are but this does not allow you to forget the spending which are safeguarding our future the next decades to come. >> speaking to chris for franz. they expect emissions by 1500 tons over the course of its six months time. really big steps and important one, as well. on to om other news. qantas says it did manage to minimize the impact of the strike for more than 6,000 of
its passengers this tuesday. the airline says around 80% of its domestic flights within 15 minutes of their scheduled times despite a four-hour work by thousands of their workers. qantas says it's committed to reach a pay agreement with the union which asked for a 15% pay increase over the next three years. concerns about a possible greek depault afault are weighi greek mind minds.
from cnn london i'm nina dos santos. >> and i'm manesha tank in hong kong. a warm welcome back today. >> 90 minutes into the trading session, second of this week, look at the indices posting gains, today's highs as i should point out, the tax updax up 1.5 ongoing concerns about a potential greek default seem to be rebounding today after some recent heavy losses. manesha? >> yeah, i will wonder are people sneaking around looking for value. that is what happened a few weeks ago. by the close, a mixed picture, the credit downgrade on -- for italy's credit and the contagion
had some investors on edge. the nikkei and hang seng is losing more than 1%. shanghai and hong kong, those rose slightly as you can see. well, two financial stocks were hit especially hard in tokyo by those fears. that mu nomura fell nearly 4%. right now, let's take a look at how things are faring. look to set to open a little higher when wall street begins trading and the obama deficit reduction plan and federal reserve two-day policy meeting are some of the things that are on investors' minds along with further concerns about the eurozone. fee leash jete lohr has our wall
street wrap. deep into the red before recovering by the end of the session & investors want to see it show a clear-cut commitment of shoring up greece's finances as well as austerity measures and the dow fell 108 to 11,401 but well off earlier lows thanks to a hate day rally. the s&p shed 1%. shares of netflix tumbled more than 7%. the former darling explained recent rate hikes and separation of its dvd rental service. it's now making an even clearer separation by changing that name to qwikster. it is a widely held tock that tripled in value over the last three years but the party may be over. shares are down 46% since the price changes took effect. coming up tuesday on wall street
investors expect more bad news and home construction is expected to show a slight decline and anticipation grows as the federal reserve begins its two-day policy meeting. the fed is scheduled to release a policy statement following the meeting. that's a wrap of the day on wall street. i'm felicia taylor in new york. >> back to europe and greece is hoping to nail down a deal to get the next installment of bailout money but worries about a greek default continue to plague global investors. life is getting tougher there and greek unemployment is more than 16%. crime and homelessness are also on the rise as are immigration and personal bankruptcies. those crippling austerity measures taking a deadly toll. depression and suicide rates are rising. recorded suicides have doubled to about 6 per 100,000 residents
annually. about 40% more greeks killed themselves in the first five months of this year than in the same period last year. well, officials also say there's been an increase in the number of patients suffering from minor psychiatric conditions such as anxiety, panic attacks and depression. definitely not minor for those going through it. more on how the crisis is affect ing them. elinda is joining us. worrying statistics. what is it that has caused the greeks to respond this way. >> we've seen austerity measures implemented in other parts of europe. what is going on there. >> reporter: i hi it has a lot to do with the act that measures are very hard. measures that the people in greece cannot see a way out of. so they find themselves in a difficult situation, the crisis hit quite suddenly for most greeks. so a lot of people had borrowed money and started investing and
found themselves in a situation where they could not pay their debts and as a result they phraseface a number of serious problems and to all kinds of situations so most of the phenomena we see are a direct result of the crisis. the other problem and what may be a little bit difficult for someone not living in greece is just kind of the everyday uncertainty of what comes next. what greece has been experiencing for months or nearly years, promises that more will be done. thing also change but then just as panic about defaults or before that other issues, so that has led a lot into situations that are unknown to them and don't though how to cope with and they just find themselves really at the verge of a nervous breakdown and as
the headlines point out. >> what do you think of the government's role in this? you mentioned the word suddenly. you said all of this hit quite suddenly. they went from a situation where they felt rich to one where they were being told they had to cut back and quite heavily. do you feel that the government's handled this badly? >> well, it's not just a government of one government but a lot of governments in greece in a country that's been as you said living beyond its means for a very long time and no one is putting an end to it. there is nobody stopping people from living this way. so we have an entire generation after the generation after the '70s that grew up believing everything was possible. that everything was open to them and suddenly comes a crisis and all that have is taken away, massive rise in unemployment.
youth unemployment exceeded 30% by now so for the young people in greece who grew up feeling the world was their oyster. they find no jobs available and cannot compete in the same way they thought they would in the global market. so things have become bad in a short space of time and certainly the government does have a role and several governments have had a role to lay in this because he could have stopped things from getting to where we are today. >> most certainly very worrying news coming out of greece but the impacts of this on the people there and hopefully in another program we can support what support measures are being put in place but for now elinda, thank you very much. >> thank you. let's bring our viewers breaking news coming from turkey. reuters news agency is reporting
there's been explosion apparently in a vehicle that it has rocked the center of the turn other capital ankara. this is from cnn turk. the explosion according to reuters last caused casualties and damage. the cause of the blast was not immediately clear. no further details were immediately available. as you can see there's been thick smoke arising from that area. we'll bring you more on this as we get it here on cnn just to reiterate, an explosion at the center of the turkish capital ankara from a vehicle. we'll try to bring you more on that. those are pictures from cnn turk. more to come on this program. a bittersweet anniversary for the chocolate industry.
there are thoshocking signs the problem still hasn't disappeared. treat you like a policy, not a person. instead of getting to know you they simply assign you a number. aviva is here to change all that. we're bringing humanity back to insurance and putting people before policies. aviva life insurance and annuities. we are building insurance around you. luck? i don't trade on luck. i trade on fundamentals. analysis. information. i trade on tradearchitect. this is web-based trading, re-visualized. streaming, real-time quotes. earnings analysis. probability analysis: that's what opportunity looks like. it's all visual. intuitive. and it's available free, wherever the web is. this is how trade strategies are built. tradearchitect. only from td ameritrade. welcome to better trade commission free for 60 days
it's a rather gray and murky looking victoria harbor. our live shot from hong kong. a warm welcome back to "world business today." >> we turn now to cnn's freedom project. a year-long effort to help rid the world of modern-day slavery focusing on something that was the end of a shameful business practice. the cocoa protocol, a deal that was supposed to end forced labor. it was a noble endeavor but many say not a successful one. richard quest reports ten years on it's still a shocking blight on the chocolate industry. >> reporter: in the film "the dark side of chocolate" we
follow undercover researchers on several cocoa farms in the ivory coast. due to cameras they see children with machetes. some are held against their will and many never even get paid. >> every single time i've got to a farm there i've seen children. now, some of them may be local children. some may be the children of the farmer. but many times they are not and it's very hard to figure out where they come from and one of the clues you have is that they don't testily speak french or the local language. >> reporter: robin romano's film also shows disturbing signs of child trafficking. children smuggled from mali and other places to work on cocoa plantations. >> this is trafficking. a child being trafficked. a child being forced to work? it doesn't get worse than that. i don't think -- it can't be
just about are there enough of them? it's a serious abuse. >> reporter: ivory coast is the world's largest producer of cocoa. the u.s. state department estimates that there are more than 100,000 children involved in the worst forms of child labor on cocoa farms throughout the country. according to an industrywide agreement, signed on september the 19th, 2001, this should not be the case. the harken engle protocol was written to put an end to forced child labor in chocolate by 2005. a deadline that's been extended to 2008 and again to 2010. >> honestly, it's hard to see anybody saying that this protocol has attained the goals that were set out in it. >> reporter: leading companies were amongst those that signed it in 2001 agreeing to commit significant resources to
voluntary standards. >> unfortunately over the last ten years we've seen very little implementation of the actual commitments. >> reporter: chris bayer spent five years in ivory coast and ghana. under a contract from the u.s. department of labor. part of tulane's oversight project monitoring the protocol's action plan and studying the scope of the problem. the initiative was set up by the protocol to bring all parties together to address the worst forms of child labor in the supply chain. in an e-mail they said "five of the six commitments made in the protocol have been completed and participants are actively working on the sixth commitment, to improve the livelihoods of cocoa growers." >> the cocoa chocolate industry has spent $5.5 million between
2001 to 2009. when we did the math, we determined that they need to spe spend at least $75 million. >> reporter: it's an industry that can certainly afford it. according to tulane researcher chris bayer in that time period the global revenue from cocoa products was an estimated $1 trillion. >> this is about companies saying it's our supply chain, we're accountable for the cocoa in our supply chain. we have to audit that supply chain just like we audit the books. >> we are talking about a population that is already vulnerab vulnerable. among the poorest in the world and this population supplies a commodity, a primary good that creates such incredible wealth and so much pleasure and indulgence. especially in the west and among
those countries that consume cocoa products so we have this disparity between incredible poverty and suffering and yet indulgence and decadence on the other hand. >> well, we bet you that all signed were invited on to present their points of view and sent out request to the top five chocolatemakers and cocoa manufacturers. so far four out of the ten have responded. let's look at those starting with mars. mars issued one that said we have all been and continue to be deeply concerned about child labor issues in west africa. reaching every one of the million of farmers there is a difficult task and we continue to be committed to achieving a permanent solution. next, cadbury is works with
other to support the protocol and then both of those two companies as well as others have been roofing to the u.s. -- excuse me, referring us to the international cocoa initiative. this is a joint group of companies that actually signed up to this particular deal and then archer daniels midland say the signatories to it would provide a skwoipts statement. we'll keep our eyes peeled for it but gives you information about the chocolate. >> okay. you know, we are now going to give you more details on that explosion that we've been hearing about in the turkish capital ankara. let's speak to someone in istanbul. tell us more about what you know happened in ankara. >> this was right in the center of the turkish capitol near the local district's mayor's oftice.
we know a mini bus blew up. it took several cars with it. and we also know that there have been ambulances rushing to the scene and there have been no confirmed reports of death or injuries but there must be suspicions that there has been some serious injuries in this attack, manesha. >> are there also suspicions this was a bomb? >> reporter: well, that's the thing. we don't know that. did it blow up because there was an lpg canister head or a deliberate explosion? the police and the security and the authorities have cleared the area concerned there might be a second explosion if it were a planned attack, the governor of ankara is rushing to the scene
commoditiesment gold is shiny once again up more than $8 trading at almost $1789 a troy ounce. well, since you've started the themen india's love affair with the metal is a long running one and their tote's maker has coated one of its cars in the stuffment check out tata's golden than foe compact car. they have decked it out with 80 kilos, no less, of 22 karat gold. 15 kilos of silver and to yous of semiprecious stones and gems and used to promote tata. it's estimated to be worth more
than $4 million. you would be mad to buy it. well, that's a pretty hefty price for what tata touted as the people's car. they targeted india's growing middle class. interest in it has fallen well short of its expectations and the carmaker only sold 1,200 nanos down 85% from august 2010. well, turning back to asia. 400,000 people in the japanese city of nagoya have been urged to evacuate their homes as a powerful typhoon emerges. good morning, jen. >> we are talking about the tie phone there pulling away from 300 kilometers away from the pain island. you can see it's spread nothing southern and western parts of
japan. you can really see that eye very well formed. more of this will be lifting through. we're also see winds increasing for areas including that southern area and western part of japan. right now the wins at 176 kp owe have have down over the last advisory. it's going to make landfall it looks like within 24 hours talking about wednesday morning, a midday local time with winds roughly right at 139 kilometers then continue to push up off towards the northeast. to give you an idea where we're thinking, osaka and this graph will put it into motion. looks like it will be close to that region down towards the south but the problem is they're already dealing with flooding because they're still recovering from a tropical storm that made landfall earlier this month and brought heavy rainfall and
caused widespread flooding. look at the totals there. 25 to 50 secentimeters. we're certainly deal with problems with flooding as well as mudden slides and landslides and i know certainly there are travel delays and warnings in place if you're going to be fly into parts of japan, back over to you two. >> okay, thanks, jennifer delgado for that update. >> that is it for this edition of "world business today." i i'mmanesha tank. >> and i'm nina dos santos. good-bye for now. manesha tank. >> and i'm nina dos santos. good-bye for now.